China Tightens Chip Design Protection With Revised Intellectual Property Rules

China has revised its regulations protecting integrated circuit layout designs, introducing stricter registration requirements and allowing punitive damages in serious infringement cases as Beijing moves to strengthen safeguards for domestic semiconductor innovation.

The revised regulations, signed by Premier Li Qiang on July 23, will take effect on October 15, according to a document published on Monday by the Justice Ministry and the China National Intellectual Property Administration through state news agency Xinhua.

Stricter Standards for Chip Design Registration

The updated rules apply to integrated circuit layout designs, which define how components are arranged within a semiconductor chip. These layouts often represent significant engineering effort and play a central role in chip development, including for companies that design chips but do not manufacture them.

Under the revised framework, applicants must demonstrate that their filings result from genuine creative activity. They will also be required to submit declarations confirming the originality of their work and clearly identify the original elements included in their applications.

Furthermore, regulators will have the authority to reject applications that clearly fail to meet these requirements. The changes also provide a stronger legal basis for challenging registrations that should not have been approved.

Focus on Protecting Domestic Innovation

The new measures do not introduce export controls. However, they reflect the growing strategic importance Beijing places on technology developed by Chinese companies.

China’s semiconductor industry has accelerated efforts to build domestic capabilities after successive US restrictions limited access to advanced chip design software and semiconductor manufacturing equipment.

Chinese policymakers have also explored broader measures to prevent strategically important technologies from being transferred overseas or acquired by foreign companies. According to a report by the Financial Times last month, proposals under consideration include restrictions on overseas production of advanced chips based on Chinese designs.

The latest regulatory revisions are intended to make it more difficult for companies to copy semiconductor designs or obtain legal rights over work developed by others.

Stronger Enforcement Measures

Alfredo Montufar-Helu, managing director at Ankura China Advisors in Beijing, said the revised regulations are designed to improve the quality of intellectual property filings.

He said that by raising originality standards, tightening registration requirements and penalising bad-faith applications, Beijing is seeking to filter out low-quality claims while distinguishing companies with genuine technological capabilities.

The regulations also strengthen legal remedies for infringement. Courts will be able to calculate damages based on either the losses suffered by rights holders or the gains obtained by infringers. In serious cases, judges may award punitive damages.

In addition, the revised rules clarify how integrated circuit layout design rights can be licensed, transferred or used as collateral. They also require organisations leading the development of such designs to provide eligible personnel with reasonable rewards and remuneration.

The updated framework reflects China’s broader efforts to strengthen intellectual property protection as the country seeks to advance its domestic semiconductor industry amid ongoing global competition in critical technologies.

With inputs from Reuters